New calls to increase personal tax allowance from £12,570 to £45,000

A new online petition is calling for the Personal Allowance to increase from £12,570 to “a more realistic figure” of £45,000. Petition creator Denver Johnson argues the current income tax threshold “has been kept unreasonably low for far too long, at the expense of the poorest, most needy people in our society”.

The ‘Raise the standard tax-free Personal Allowance to £45,000’ petition has been posted on the petitions-parliament website where it will be entitled to a written response from the UK Government if it receives 10,000 signatures. The petition adds: “We feel that the poorer majority should pay substantially less than the wealthy. We think that the tax system seems designed to make the divide between rich and poor increase exponentially.”

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The Scottish Government recently confirmed income tax rates north of the border will be frozen until at least the end of the current Parliament in 2026. During the Budget on December 4, Finance Secretary Shona Robison also announced the basic and intermediate rate thresholds will be frozen, effectively pulling more Scots workers into lower tax bands.

The SNP has introduced additional tax bands since 2017 and Ms Robison said the decision to freeze rates means the majority of people in Scotland will pay less income tax than those in the rest of the UK. However, people in Scotland begin paying more in tax after earning more than £28,800 a year and the difference in thresholds with England, Wales and Northern Ireland increases significantly on earnings of more than £50,000 a year.

That, alongside the freezing of tax thresholds, saw the levels of tax between Scotland and the rest of the UK diverge significantly.

If confirmed by MSPs in February, the changes in the Budget for 2025/26 mean the basic and intermediate rate thresholds will increase by 3.5 per cent to £15,397 and £27,491 respectively.

The higher, advanced and top rate thresholds will be maintained at £43,662, £75,000 and £125,140 respectively.

Scottish income tax thresholds

The table below shows the 2024/25 Scottish Income Tax rates you pay in each band if you have a standard Personal Allowance of £12,570. You do not get a Personal Allowance if you earn over £125,140.

Tax thresholds in England and Wales 2024/25

According to the Independent Institute for Fiscal Studies, Scotland’s top rate of income tax may have reduced revenues for the Government, although it admitted uncertainty over the exact figure.